NCPA - National Center for Policy Analysis

Higher Insurance Rates Charged to Airlines Flying to Middle East

March 24, 2003

Insurers in London have begun charging extra for war insurance on commercial airline and charter flights into parts of the Middle East, brokers report.

  • The additional costs would be higher for carriers flying into countries bordering Iraq -- Kuwait, Saudi Arabia, Jordan, Syria, Turkey and Iran.
  • There are few details on pricing levels, but the surcharge on one evacuation flight out of Kuwait yesterday was $100 per passenger in addition to the usual premium paid on the airplane annually.
  • Brokers and insurers said flights into and out of the United Arab Emirates -- which is roughly 600 miles from Iraq --as well as other Gulf states, were almost certainly going to have to pay extra for coverage.

Insurers are said to be wary of creating too large a financial shock, fearing that carriers will be forced to seek insurance from governments or create their own nonprofit insurance companies.

Source: Joseph R. Treaster, "Extra Rates Are Charged for Flights to Mideast," New York Times, March 21, 2003.


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